Research funding system

The public sector provides approx. 30 per cent of all spending on research and development in Germany. Thus Germany is one of the nations worldwide whose governments invest the most in R&D – both in absolute terms and as a percentage of GDP.

The Federal Republic of Germany is based on the principle of federalism and on constructive cooperation between the Federal Government and the 16 individual states, the so-called Länder. That entails a differentiated distribution of the responsibilities for and the financial costs of research and research funding. The Federal Government and the states act independently with regard to the funding and organisation of research.

In addition to funding higher education, the public sector also finances non-university research organisations that are especially involved in fostering research talent.

The Federal Government and the Länder continue to finance funding organisations such as the German Academic Exchange Service (DAAD), the world’s largest funding organisation for the international exchange of students and researchers, and the Deutsche Forschungsgemeinschaft (DFG), whose main task is the selection and funding of the best research projects by scientists and scholars at higher education and public research institutions in Germany.

German companies make the largest contribution to German research and development funding. In 2020, for example, business enterprises invested roughly 71 billion euros in R&D (internal expenditure). Industry runs its own research institutes in specific fields and cooperates with public institutions through various interfaces. Furthermore, German companies invest a great deal of money in developing academic talent, especially by funding scholarships or endowing professorships.

In addition, there are more than 5,400 foundations incorporated under civil law in Germany that aim to promote science.

The Stifterverband is an association of foundations, which in 2021 alone provided 18.7 million euros in funding for education, science and cooperation between business and science. Additionally, roughly 11.6 million euros are used to fund endowed chairs.

Last but not least, the European Union funds top-level research and outstanding scholars and scientists with Horizon Europe (2021–2027), an ambitious research and innovation programme worth 95.5 billion euros. Its “Excellent science pillar” supports frontier research projects defined and driven by researchers themselves through the European Research Council (ERC), funds fellowships and exchanges for researchers through Marie Skłodowska-Curie Actions, and invests in world-class research infrastructures.